S & P 500 Chart Trend Watch: Reversal Coming Up?

by The Smarter Wallet on December 1, 2009

More stock technical analysis of the S & P index.

Due to light trading expected in the following month thanks to the holidays, the technical analysts out there are anticipating some volatility in the stock market. When there’s lighter volume, there can potentially be greater spikes to expect from the markets.

So what is our favorite chart analyst telling us these days? I follow Adam Hewison from INO.com, who tells us what to watch out for when analyzing stock charts. Of course, this is directed to those of you who buy into the idea that it’s possible to study stock charts in order to make reasonable and sound “guesses” as to what could possibly happen in the future.

If you look at the S & P 500 index chart right now, you’ll see a confident march upwards since the established low of around 676 in March 9, 2009. Yesterday, this market closed at 1095. That’s a huge runup of 60% from the low. Is it just me or is anyone else getting nervous about this unchallenged uptrend?

You may want to check your take on the market against that of other analysts. Adam provides some hints about what may be in store for the general market in his analysis of the S & P 500 chart in the following video.

Please click this link or the image below to watch the video.

S & P 500 chart

This video attempts to identify those points where a possible major trend change can occur in the S & P 500 index (a reversal may be triggered if the index pulls back to 991, for instance). The call here is not that it will occur, but that if it does occur, then the market will be more vulnerable to a deeper slide.

So if you’re antsy about your current trading positions, you may be interested to know what the INO.com stock charting tool has to say about when to do an “about face” or when to exit your short term positions. Note that this analysis only applies to active traders who are planning to time the market (e.g. those who are comfortable and experienced with trading). Meanwhile, long term investors should stick to their investment programs and make sure that they continue to conform to their asset allocations, regardless of how the market is behaving at any one moment.

INO.com Technical Analysis Tools

If you’d like to know more about how MarketClub works and the kind of vernacular it uses, then look no further than our MarketClub stock trading system review. We cover its features in detail in that article. Additional tools by INO.com are free, including this Trend Analysis tool and this free video channel where you can learn about investing and trading at no cost.

For more on the type of analysis done by INO.com’s various tools, check out these articles.

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